FedEx sees healthy global economy in 2H of its fiscal year

DesireeJ. Hanford

FedEx Corp. (FDX) expects a healthy global economy in the second half of its fiscal year, led by continued strong growth in Asia, Chairman, Chief Executive and President Frederick W. Smith said Wednesday.

The Memphis package-delivery company also expects "somewhat slower" growth in the U.S. during the second half of its year, with softness in the housing and manufacturing sectors, Smith said during a conference call to discuss fiscal second-quarter results.

In pre-market trading, FedEx shares were changing hands at $110.45, down $3.55, or 3.1%.

The company had its busiest night in its history Monday, moving about 9.8 million packages through its network, Smith said. The result was in line with FedEx's expectations.

FedEx's Internet site had its busiest day Dec. 11, with about 1.7 million packages being shipped through FedEx.com, he said, adding that it's another sign of growth in e-commerce.

FedEx is "confident" about its business, Smith said.

The company reported fiscal second-quarter results before the markets opened Wednesday, posting an 8.5% increase in earnings. FedEx had net income of $511 million, or $1.64 a share, for the quarter that ended Nov. 30. That compares with $471 million, or $1.53 a share, in the year-earlier period.

Excluding costs associated with a new pilot labor contract at FedEx Express, the company earned $1.89 a share.

Revenue rose 10% to $8.93 billion from $8.09 billion.

Analysts polled by Thomson First Call expected, on average, for FedEx to earn $1.76 a share on revenue of $8.91 billion.

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